Business, Legal & Accounting Glossary
A situation in which two or more averages or indexes fail to show confirming trends.
Divergence occurs when the trend of price doesn’t follow the trend of its indicator.
Traders make transaction decisions by identifying situations of divergence, where the price of a stock and a set of relevant indicators, such as the On-Balance-Volume, are moving in opposite directions.
Bullish divergence: the indicator is making a new high while the price does not.
Bearish divergence: the indicator is making a new low while the price does not.
bullish divergence
trigger line
workout period
bearish divergence
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This glossary post was last updated: 29th October, 2021 | 0 Views.